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Abstract

Congressional concern with cost overruns, or breaches, in several major defense acquisition programs led the authors, in a partnership with the Performance Assessments and Root Cause Analysis Office in the Office of the Secretary of Defense, Acquisition, Technology, and Logistics, to investigate root causes by examining program reviews, analyzing data, participating in contractor briefings, and holding meetings with diverse stakeholders. The analysis of cost overruns in four programs revealed several contributory factors, including changes in the economy, misestimation of costs, and inadequate program planning. Underestimation of baseline costs; increases in component costs; insufficient Research, Development, Test, and Evaluation; inflation; and increased, inadequate, or unstable program funding were identified as root causes in all four programs.

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The research described in this report was prepared for the Office of the Secretary of Defense (OSD). The research was conducted within the RAND National Defense Research Institute, a federally funded research and development center sponsored by OSD, the Joint Staff, the Unified Combatant Commands, the Navy, the Marine Corps, the defense agencies, and the defense Intelligence Community.

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